The Infinite Well

An infinite well is when you can set up a cycle on a token, any token, that has some arbitrage to it. This usually works best with, say, a protocol token and its LSD ('liquid staking derivative').

GEIST

Let's take a simple, albeit nontraditional infinite well: @GeistFinance $GEIST.

They have a 3-month vesting period, where vests occur on Thursdays (once per week), so, an infinite $GEIST well looks like this: 

"How is this infinite?" you may ask, as this is key.

The infinitude of this well is that I don't supply $GEIST to this well, the @GeistFinance money market does.

So, $GEIST 'goesin' and $GEIST 'comesout' on the regular, without hitting my wallet.

Thus you have infinitude.

The Infinite $GEIST Well has layers to it, like an onion, or maybe even a parfait, because, the $GEIST, once vested, can again be locked to earn a higher percentage of the money market fees.

These money market fees also include the $GEIST token, itself, so this well feeds itself.

Now, someone will point out that this means $GEIST is inflationary.

No argument from me.

But I'm not retaining value with $GEIST. I've spent $0.00 on this token. I use this infinite well to generate fee-yields, which being in $ETH, $FTM, and other tokens, I DO retain value in.

FTM

So, now. Let's pivot, and look at a traditional Infinite Well, a well, I DO invest into in order to retain and to grow value.

I've had several: $ONE, $LUNA (now $LUNC, or: ded), $LUNA (2.0 version), and, starting right now:

$FTM.

The idea to the value-producing Infinite Well is that you have a token of value (in this case, $FTM), that, by using arbitrage on the LSD ('liquid staking derivative') you can unbound the LSD to produce MORE $FTM than by simply HODL'n the LSD.

How does this work in practice?

You see that by staking 1,000 $FTM on @staderlabs you get back 921 $sFTMX.

Why less? Because the LSD, $sFTMX, is valued to the token, $FTM, plus ALL ITS ACCUMULATED STAKED YIELDS!

This means 1 $sFTMX grows in value vs. $FTM, and grows in value vs. $FTM OVER TIME!

But you now HODL your own $sFTMX, and this is vital, because, you, as the owner of your own LSD, can do whatever you like with it.

• You can HODL it, of course.
• You can put it into an LP.
• You can unbound it.
• And you can trade it.

Where there's trade, there's arbitrage.

And here is the arbitrage. Go to any exchange, and you see you get a different amount of $sFTMX from a $FTM-swap.

On @beethoven_x, I got 949 $sFTMX for my 1000 $FTM, or 28 more $sFTMX.

You BETCHA I'm taking those extra $sFTMX.

You BETCHA.

So, now I have those $sFTMX tokens.

I can HODL'm for a 4.7% APR.

BUT, if I unstake on @staderlabs, I get back 1004 $FTM in 7 days.

That's 19% APR, according to my spreadsheet.

I do this process once-per-day, and after 7 days of doing this daily, I have an Infinite $FTM Well.

 

Concern

19% is great, but you see I'm doing better than that with my already-established Infinite $LUNA well.

AND: I only get back 1004 $FTM tokens for unstaking 949 $sFTMX tokens. According to the exchange rate, I SHOULD get back 1,030 $FTM tokens.

@staderlabs: care to comment?